Giving you the best advice to help your business grow

We’ve all known the different financing methods obtained by companies such commercial loans and receivables financing. Under the latter, two types can spring forth which are discounting and factoring. One common and popular type of the latter is what we call single invoice factoring. What is it?

It is frankly the same as the traditional type. It provides the same effects and has the same benefits. The differentiating factor is in the number of invoices. With whole turnover o traditional factoring, you sell your entire sales ledger thereby

1. It is quick and simple.

When you need funds, especially in emergency situations, you want a process that is simple, crystal clear, easy and not to mention fast. If you need resources for expenditure due in five days then why would you go for a financing scheme that takes you a month before you get access to it? Single invoice factoring is simple and lighting fast. You can get hold of your needed funds in twenty four hours or less.

2. It can generate funds and therefore immediate working capital and cash flows.

Because of its swiftness, your business gets access to immediate working capital and a quick injection in the cash flow. This makes it easier for your business to pay suppliers thereby creating better relationships.

3. You release and get to use locked up cash.

You may have promising sales but the cash they generate may not be available to you. Also, you may have scored a particular sale but then you are not able to use its value. You’d have to wait out. Factoring can definitely hasten things up and you can advance the invoice’s value even before your customer pays.

4. You get to advance eighty five percent (85%) to ninety percent (90%) of the value of your invoice.

The remaining percentage to this will be forwarded only upon complete collection from your customers to whom the receivable is due. This remaining balance will then be less any fees.

5. It doesn’t require as much hassle as traditional loans.

You don’t have to provide quarterly and annual financial statements, asset listing, financial information on company owners, credit score and the like to the financial institution. This is because they will leverage not on your financial capability to pay but that on your customers instead.

6. It will not create a negative effect on your balance sheet.

Because it is not a loan, your balance sheet does not suffer increasing liabilities. In fact, you become more liquid as you can easily and quickly recognize and transform your receivables to cash.

7. It is cheaper and gives you more freedom than whole turn over factoring.

Lastly, single invoice factoring is far cheaper than the whole turnover type. You wouldn’t have to sell your entire sales ledger. You get to choose which invoice and when to advance its value.